First half 2004 Results - LVMH · 2014-10-23 · • Sephora branded products to create customer...
Transcript of First half 2004 Results - LVMH · 2014-10-23 · • Sephora branded products to create customer...
First half 2004 Results
September 15, 2004
Bernard Arnault
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Excellent performance in H1 2004
• Strong 14% organic sales growth
• Operating income increases 14 %
• Net income up 49 %
• Cash flow from operations grows 11 %
Gained market shareGained market share
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Improvement of operating margin
In an unfavorable currency context
• Progress in Wines & Spirits
• Remarkable performance by Louis Vuitton
• Return to profitability in Watches & Jewelry
• Very strong improvement in Selective Retailing
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Growth drivers in 2004
• New product launches• Louis Vuitton’s new leather line Trianon,
new LV Cup line and first jewelry collection Emprise
• New perfumes at Dior and Guerlain
• New Chiffre rouge watch at Dior …
• Numerous communication initiatives
• Expansion of store network
Maintain objectiveof significant increase of operating income
Maintain objectiveof significant increase of operating income
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2005 : Continued growth
• Markets growing
• New clientele
• New market share gains
• Continued improvement in profitability
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• Solid foundation …• Unique portfolio of well-known brands
• Talented and proactive teams
• Strong commitment to creativity and quality
• Financially sound with disciplined management
• … to seize all new growth opportunities• Geographic expansion
• New product categories
• More active portfolio management
Continue to drive the worldwide leadership of LVMH in the luxury sector
Continue to drive the worldwide leadership of LVMH in the luxury sector
A strong growth momentumfor longer term
Jean-Jacques Guiony
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Key figures
in millions of Euros
Net sales 5 236 5 678 +8%
Gross margin 3 507 3 729 +6%
Marketing and selling expense(2 042) (2 138) +5%General and Admin.expense (591) (595) -
Operating income 874 996 +14%
Net financial expenses (93) (73) -22%Other income & expenses (77) (52)Income taxes (236) (272)
Net income beforegoodwill amortization 408 539 +32%
Net income 265 396 +49%
H1 2003 % variationH1 2004
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14 % increasein H1 2004 operating income
in millions of Euros
Variation (in m Euros)
Wines & Spirits 321 335 +14
Fashion & Leather Goods 634 634 -
Perfumes & Cosmetics 39 42 +3
Watches & Jewelry (38) 2 +40
Selective Retailing (15) 76 +91
Others & eliminations (67) (93) (26)
LVMH 874 996 +122
H1 2003 H1 2004
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Currency impact
3 components :
• Exported sales
• Conversion of foreign subsidiary results
• Variation of results from hedging cover
Total impact = (170) M Euros in H1 2004Total impact = (170) M Euros in H1 2004
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in millions of Euros
33% increase in operating incomeat constant currency and hedging cover
H1 2003 H1 2004
874
Currency impact
996
+ 292
Improvement(price/mix/volume/
cost savings…)
- 170
incl : Fashion & Leather Goods -90 M
Wines & Spirits -60 M
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Healthy financial structure
30/06/04 30/06/0431/12/0331/12/03
20.520.5
12.6
3.7
4.2
12.6
3.4
4.5
in billions of Euros
61%
17%
21%
61%
18%
22%
20.5 20.5
8.8
43%
5.326%
6.431%
8.8
43%
5.627%
6.130%Other current
assets
Investments andother assets
Inventories
Stockholders’equity & minorities
Long termliabilities
Currentliabilities
ASSETS LIABILITIES
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Continued reduction in financial expenses
• Reduction of net debt compared to June 30, 2003• In line with gearing objective of around 50% at end of 2004• Reduction of net debt compared to June 30, 2003• In line with gearing objective of around 50% at end of 2004
9373
H1 2003 H1 2004
in millions of Euros
- 22%
Net financial expenses
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11% improvementin cash flow from operations
548
749828
H1 2002 H1 2003 H1 2004
in millions of Euros
+11%
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Hedging cover
EUR / USD 0.97 1.09 1.25
% cover 88% 66%
EUR / JPY 118.5 124.7 130.3
% cover 94% 34%
2003 2004 2005
• Favorable hedging cover in 2004 but at a lower level than 2003
At September 7, 2004
Antonio Belloni
Perfumes & Cosmetics
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Perfumes & CosmeticsKey figures
4239
H1 2003 H1 2004
973974
H1 2003 H1 2004
Net sales Operating income
in millions of Euros
Organic growth : + 7%
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Perfumes & CosmeticsH1 2004 – Highlights
• Parfums Christian Dior continues its development• Worldwide progress in make-up segment
• Excellent performance in Japan and China
• New products
• Guerlain confirms its recovery• Success of L’Instant de Guerlain in key countries
• Strengthened communication and improved profitability
• Continued strong growth of younger brands
Perfumes & Cosmetics2004 Outlook
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• Objective : reinforce strategy and gain market share
• Numerous innovations at Parfums Christian Dior • New women’s perfume, Pure Poison, and new make-up products
• Start of Charlize Theron as new “face” of J’Adore
• Reorganisation of US distribution
• New products at other principal brands• International roll-out of Kenzo Air
• Development of make-up lineLe Make-Up at Givenchy
• Launch by Guerlain of men’s version of L’Instant
Perfumes & Cosmetics2004 Outlook
Watches & Jewelry
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Watches & JewelryKey figures
234210
H1 2003 H1 2004
Net sales
210234
2
-38
Operating income
in millions of Euros
H1 2003 H1 2004
Organic growth : + 32%
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Watches & JewelryH1 2004 - Highlights
• Double digit sales increase across all brands• Gained market share• Successful launch of accessible products : Formula One
at TAG Heuer, Liens ring at Chaumet• Success of Zenith repositioning in high-end mechanical watches
• Strong improvement in profitability• More profitable mix of products• Improved industrial productivity• Efficient marketing investments
focused on star products and key markets
• Excellent feedback on new products presented at the Basel Watch Fair
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Watches & Jewelry2004 Outlook
• Return to profitability on track
• Industrial and administrative savings to fund communications
• Continue major innovations in H2 • Aquaracer and 40th anniversary celebration of Carrera
by TAG Heuer
• Montre Chiffre rouge developed by Hedi Slimaneat Christian Dior
• Women’s line Open Star at Zenith
• Class One rings and Liens watches at Chaumet
• Reopening in September of historic Chaumet boutiquein Paris
Watches & Jewelry2004 Outlook
Selective Retailing
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Selective RetailingKey figures
-15
76Net sales Operating income
in millions of Euros
H1 2003 H1 2004
Organic growth : + 21%
1 5421 353
H1 2003 H1 2004
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Selective RetailingH1 2004 - Highlights
DFS
• Increased sales due to recovery in tourism
• Improved profitability : good cost controls
• Transfer of head-office to Hong Kong - nearerto Chinese customer
Sephora
• Market share gains in France and efficiency of innovative products and services
• Double digit sales increase in US andincrease in profitability
• Good start in Russian market
Selective RetailingH1 2004 - Highlights
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Selective Retailing2004 Outlook
• Continue recovery at DFS• Take advantage of improving travel retail
• Adapt offer and services to a more varied clientele
• Maintain rigorous cost control
• Strengthen worldwide competitiveness of Sephora• Innovation leadership throughout Europe
• Gain market share and “cool factor” in US
• Sephora branded products to create customer loyalty and improve profitability
Wines & Spirits
Christophe Navarre
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Wines & SpiritsKey figures
in millions of Euros
354 415
443496
H1 2003 H1 2004
Net sales
797
911
Operating income
Champagne& Wines
Cognac& Spirits
182 188
139 147
H1 2003 H1 2004
321335
Organic growth : + 19%
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Wines & SpiritsH1 2004 - Highlights
• Continued volume growth of star brands
• Price increases implemented in all markets
• Consolidation of distribution network in Italy, UK and Austria
• Increased efficiency of the distribution network in the US thanks to new organization
• Creation of Schieffelin & Co
• Creation of a US committee
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Champagne & Wines H1 2004 - Highlights
• Increased market share in key regions, particularly in UK, US and Japan
• Successful launch of new Veuve Clicquot non-vintage rosé in Japan
• Continued success of still wines portfolio
• Development of high-end products with high margins (ex : Dom Pérignon, Krug, Ruinart,rosé champagnes), particularly in US and Japan
Launch of Dom Pérignon 1996
Launch of Dom Pérignon 1996
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Cognac & Spirits H1 2004 - Highlights
• Strong growth in VS and VSOP segments in US
• Rapid development of Hennessy in China, Taiwanand Russia
• Improving product mix
• Good result for super-premium vodkas in US
Hennessy USA
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Wines & Spirits 2004 Outlook
• Pursue value creation strategy through firm pricing policy and development of premium qualities
• Reinforce leadership in high-end segments, particularly in high-image accounts
• Continue steps taken to reinforce our distribution network
• Continue focus on innovation and image of star brands in key markets
Dom Pérignon Irodori 1996
La Grande Dame Pucci 1996
Veuve Clicquot Ice Jacket
Fashion & Leather Goods
Yves Carcelle
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Fashion & Leather GoodsKey figures
634634
H1 2003 H1 2004
2 0231 896
H1 2003 H1 2004
Net sales Operating income
in millions of Euros
Organic growth : + 11%
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Fashion & Leather GoodsH1 2004 - Highlights
• Double-digit organic sales growth of Louis Vuitton• Strong demand from local clientele in Asia and US,
especially with February opening of LV flagship on 5th Ave, New York• Continued growth of sales to Japanese clients• Excellent performance of Multico and Suhali lines• Successful new leather products :
Damier Géant line, Theda and Leonor handbags,Monogram Multipoches
• Contract with Marc Jacobs extended for 10 years
• Repositioning of Fendi continues • Continued investments in store network• Good performance in Asia and US
• More selective distribution at Donna Karan• Continued growth of Celine, Marc Jacobs,
Pucci and Berluti
Fashion & Leather Goods2004 Outlook
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Fashion & Leather Goods 2004 Outlook
• Fendi : development of new products and new advertising campaign
• Donna Karan : new DKNY accessories lines
• Accelerate growth at Celine, Marc Jacobs, Berlutiand Pucci
• New stores :• Marc Jacobs : Boston, Los Angeles
• Celine : Hangzhou, Las Vegas, Berlin and reopeningof Ave Montaigne
• Pucci : New York, Las Vegas, Tokyo
Celine : Avenue Montaigne, Paris
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Louis Vuitton2004 Outlook
• Important new stores :Tokyo Namiki Dori, Shanghai Plaza 66,Rodeo Drive, Sloane Street,...
• New territories : Red Square Moscow, Johannesburg, Mumbai
• New advertising campaigns featuring 4 young actressesand 1 actor
• Several events to celebrate 150th anniversary
• New products• First jewelry line Emprise
• New Trianon line
• New LV Cup line
• New Tambour watch models(Lovely Pink, Regate)
Louis Vuitton : 150th anniversary in Hong Kong
Louis Vuitton : Red Square, Moscow
Louis Vuitton : Mumbai, India
Louis Vuitton : Tokyo Namiki Dori
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Fashion & Leather Goods Outlook - China
• Key figures
• 10 cities of 4 million or more inhabitants ; 171 cities of more than 1 million inhabitants
• Important commercial centers specializing in Luxury :4 in Shanghai, 5 in Beijing, 3 in Guangzhou, 3 in Shenzhen,...
• Tourists in 2003 : 20.2m Chinese travelling abroadof which 8.4m Chinese travelling to Hong Kong
=> estimates : 49 million in 2008 and >60 million in 2010Objective : 100 million by 2015 (source : EIU 2004)
• Proportion of young people (post-communism)
• 727 million < 35 years old - ie. 60% of total population of which 320m between 20 and 34 years old (nb: 27m Japanese between 20 and 34 years old)
=> China : exceptionally strong potential local and touristic markets
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Fashion & Leather Goods Outlook - China
• First opening of Louis Vuittonin Beijing Palace Hotel 12 years ago in 1992
• By year end, Louis Vuitton will be present in 10 citieswith 13 stores
• In September, opening of a 1000 m² Louis Vuitton storein Shanghai
• Local organization complete (general management, marketing team, human resources, finances) based in Shanghai
=> Established presence
=> Excellent visibility of our brands
Louis Vuitton : Shanghai
First half 2004 Results
September 15, 2004